Kweichow Moutai Earnings: Results In Line; Uptick in Dividend Payout Ratio Lifts Investor Confidence

Wide-moat Kweichow Moutai's decent second-quarter results reaffirmed resilient demand for premium baijiu, despite still-sluggish consumer sentiment. The 17% year-over-year sales growth and 16% net profit growth were largely consistent with its first-quarter performance, which is slightly ahead of the firm's target of 15% sales growth in 2024. In addition, cash flows remain robust, with cash received from product sales rising 23% from a year ago, and advanced payment increasing to CNY 11.2 billion, up from 8.2 billion a year ago, indicating the solid earnings quality and growth outlook in the coming quarters.